Abstract Articular cartilage lines the surfaces of joints and transmits the forces generated with loading; however, cartilage can be damaged due to traumatic injury and disease and has a limited natural healing capacity. Although there have been many advances in the development of cartilage therapies with autologous mesenchymal stromal cells (MSCs), there is still much work to be done in order to identify the appropriate cell carriers and culture environments that best promote the formation of functional cartilage. Our general approach for MSC-based cartilage repair has been to engineer environments that recapitulate key developmental signals. Towards this, in early funding cycles, we engineered hydrogel environments based on the biomolecule hyaluronic acid (HA), including controlled degradation, growth factor presentation, and mechanical loading. During the most recent funding cycle, we tethered and controlled the temporal presentation of a bioactive peptide (HAV) found in N- cadherin, which is abundant in the developing microenvironment and mediates direct cell-cell communication. In this renewal, we continue to address developmentally relevant cell-cell signaling, focusing now on indirect communication mechanisms. Specifically, we recently found that a small fraction of differentiated chondrocytes improves the amount and quality of matrix formation by MSCs and promotes their phenotypic stability. We further showed that this phenomenon was the consequence of paracrine vesicle-mediated cell-to-cell signaling from ?broadcasting? chondrocytes to ?receiver? MSCs. Here, we hypothesize that both the production and reception of these signals is regulated by the microenvironment (matrix stiffness, interaction with developmental ligands, and molecular diffusivity of the embedding material). To address this novel hypothesis, the first Aim will utilize our recently developed microenvironmental screening platform to determine the hydrogel formulation that optimally supports MSC chondrogenesis in co-cultures of MSCs and chondrocytes. This will be achieved by spatially varying peptide and encapsulating material properties and imaging early markers of chondrogenesis and cartilage matrix formation to identify optimal environments. In the second Aim, hydrogel formulations that optimize MSC chondrogenesis in co-cultures will be scaled up and evaluated over longer time courses and when implemented in an injectable format that is compatible with current clinical workflows. In the third Aim, these optimized formulations will be arthroscopically administered in clinically-relevant load-bearing porcine focal cartilage defects to assess the efficacy of this cell delivery system to promote functional repair. Successful completion of these Aims will identify new translational options for patients suffering from cartilage injuries.